Today, when you read about healthcare, you read about reform. There is no doubt that the healthcare industry is changing, and demand for quality outcomes plays a big role in this change.
Value-based medicine and value-based benefits design are here and it is time for health plans to leverage their long-held mantra that improved clinical results also result in economic efficiencies.
General surgery is one area of healthcare that has evolved, specifically, with the growth in minimally invasive surgery (MIS), which provides benefits not only to payers, but to patients and providers alike. Typical MIS patient benefits include faster healing, less pain and scarring, and quicker return to normal activity.
By implementing a well designed benefits plan that reflects the value of MIS, health plans can continue to advance patient care and overall outcomes, as well as reduce costs related to health benefits.
A case in point is the Colorado Springs School District 11 (D11), a K-12 school district representing the majority of students in the Colorado Springs area and "home" to 3,400 employees, with a self-funded and governed medical plan that covers a total of 6,000 individuals.
D11 needed to decrease the escalating costs of healthcare benefits, in large part brought on by an aging workforce and an increase of chronic illnesses. The escalating healthcare costs were hurting the district in more ways than one—it reduced the flow of money that went directly to education and hindered the district's ability to offer competitive salaries and hire qualified teachers.
In collaboration with its third-party administrator, D11 revamped its health plan to emphasize and promote the benefits of minimally invasive surgery to its members over more invasive, open surgeries when appropriate.
For five pre-selected surgeries, the health plan offered a member who opted to undergo a minimally invasive surgical procedure over open surgery a reduced co-payment: $400 less for an in-patient surgery and $200 less for an outpatient surgery—a monetary incentive for patients in addition to the physical benefits of MIS.
D11 also provided members with the necessary educational resources to become better consumers of health and to make well-informed decisions when it came to MIS. For example, D11 distributed informational materials and links to Web sites, such as MIPInfo.com.
In addition to improving the quality of care for its members, D11 saved about $1 million in direct hospital and surgeon claim costs over a two-year period—a conservative cost savings estimate given that only direct costs were assessed. Indirect benefits included reduced employee absenteeism, improved productivity, and reduced expenditures for post-surgery prescription drugs and rehabilitation services.
Other benefits incurred from the MIS initiative included lowered premiums, reduced costs for substitute teachers (because of a quicker return to work by employees), and reduced hospital-acquired infections and related costs.
Health plans can continue to promote the adoption of value-based procedures by promoting minimally invasive surgery, in order to establish a win-win-win scenario for themselves as well as employers and patients.
Ken Detweiler is an officer of the Colorado Business Group on Health. He was previously director of risk-related activities for Colorado Springs School District 11. He worked for the district for 14 years and was responsible for employee benefits, risk management, insurance, and safety.